Yet Another Call for a Greater Role for Good Faith in the South African Law of Contract: Can we banish the Law of the Jungle, while avoiding the Elephant in the Room?

Authors

DOI:

https://doi.org/10.17159/1727-3781/2013/v16i5a2431

Keywords:

Contract law, Good faith, Bona fides, Substantive equity, Ubuntu, Public policy, Fair dealing, Judicial conservatism, Legal uncertainty, Constitutional values, Constitutionalisation of the common law, Boni mores in contract law, Unfair contracts

Abstract

 

This article examines the current approach of the South African courts to the role of good faith or bona fides in contracts, as well as the courts’ stated reasons for this approach. The article specifically examines how arguments based on good faith have fared in the Constitutional Court to date, and the prospects for law reform to emanate from that court in the near future. The author suggests an understanding of good faith which he believes is in line with the Constitution of the Republic of South Africa, 1996 and argues that in terms of such an understanding of a robust good faith doctrine the legal fraternity or the courts can avoid some of the dangers that the judges of the Supreme Court of Appeal have warned about in this context in recent years. The author shares some concluding thoughts on the pressing need for law reform with respect to the role and presence of good faith in contracts.

    

Downloads

Download data is not yet available.

References

Bibliography

Annor 2012 Without Prejudice

Annor E "Whose duty is it anyway?" 2012 Without Prejudice Mar 52-53

Barnard 2005 SAJHR

Barnard AJ "A different way of saying: On stories, text, a critical argument for contractual justice and the ethical element of contract in South Africa" 2005 SAJHR 278-292

Barnard-Naudé 2008 Constitutional Court Review

Barnard-Naudé AJ "'Oh what a tangled web we weave ...' Hegemony, freedom of contract, good faith and transformation - Towards a politics of friendship in the politics of contract" 2008 Constitutional Court Review 155-208

Barnard-Naudé 2011 Stell LR

Barnard-Naudé AJ "Deconstruction is what happens" 2011 Stell LR 160-172

Barnhizer 2005 U Colo L Rev

Barnhizer D "Inequality of bargaining power" 2005 U Colo L Rev 139-241

Bhana 2007 SALJ

Bhana D "The law of contract and the Constitution: Napier v Barkhuizen (SCA)" 2007 SALJ 269-280

Bhana and Pieterse 2005 SALJ

Bhana D and Pieterse M "Towards a reconciliation of contract law and constitutional values: Brisley and Afrox revisited" 2005 SALJ 865-895

Bohler-Müller "Some Thoughts on the Ubuntu Jurisprudence"

Bohler-Müller N "Some Thoughts on the Ubuntu Jurisprudence of the Constitutional Court" in Cornell D and Muvangua N (eds) Ubuntu and the Law: African Ideals and Postapartheid Jurisprudence (Fordham University Press New York 2012) 477-488

Botha 2001 THRHR

Botha H "The legitimacy of legal orders (3): Rethinking the rule of law" 2001 THRHR 523-?

Brand 2009 SALJ

Brand FDJ "The role of good faith, equity and fairness in the South African law of contract - the influence of the common law and the Constitution" 2009 SALJ 71-90

Cassim 2005 SALJ

Cassim MF "Medscheme v Bhamjee: The concept of economic duress" 2005 SALJ 528-541

Da Silva Filho 2006 Penn St Int'l L Rev

Da Silva Filho JCM "The human person and objective good faith in contract relations" 2006 Penn St Int'l L Rev 405-432

Davis 2010 SAJHR

Davis D "Transformation: The constitutional promise and reality" 2010 SAJHR 85-101

Davis 2011 Stell LR

Davis DM "Developing the Common Law of Contract in the Light of Poverty and Illiteracy: The Challenge of the Constitution" 2011 Stell LR 845-864

Dirix 2010 TSAR

Dirix E "Some thoughts on the future of private law" 2010 TSAR 76-79

Eisenberg 2000 CLR

Eisenberg MA "The Emergence of Dynamic Contract Law" 2000 CLR 1743-1814

Gordon "New Developments in Legal Theory"

Gordon R "New Developments in Legal Theory" in Kairys D (ed) The Politics of Law 2nd ed (Pantheon New York 1990) 281-293

Hahlo 1981 SALJ

Hahlo HR "Unfair contract terms in civil law systems" 1981 SALJ 70-80

Hale 1923 Political Science Quarterly

Hale R "Coercion and Distribution in a Supposedly Non Coercive State" 1923 Political Science Quarterly 470-478

Hartkamp Towards a European Civil Code

Hartkamp A et al Towards a European Civil Code 2nd ed (Ars Aequi Libri Nijmegen 1998)

Hawthorne 2003 SAMLJ

Hawthorne L "The end of bona fides" 2003 SAMLJ 271-278

Hawthorne 2005 SAMLJ

Hawthorne L "Abuse of a right to dismiss not contrary to good faith" 2005 SAMLJ 214-221

Hawthorne 2006 Fundamina

Hawthorne L "Legal tradition and the transformation of orthodox contract theory: The movement from formalism to realism" 2006 Fundamina 71-86

Hawthorne 2010 SAPL

Hawthorne L "Justice Albie Sachs's contribution to the law of contract: Recognition of relational contract theory" 2010 SAPL 80-93

Hefer 2004 Journal for Juridical Science

Hefer JJ "Billikheid in die kontraktereg" 2004 Journal for Juridical Science 1-14

Hutchison 2010 Stell LR

Hutchison A "Gap filling to address changed circumstances in contract law - When it comes to losses and gains, sharing is the fair solution" 2010 Stell LR 414-428

Hutchison 2013 Stell LR

Hutchison A "Reciprocity in contract law" 2013 Stell LR 3-30

Hutchison 2001 SALJ

Hutchison D "Non-variation clauses in contract: Any escape from the Shifren straitjacket?" 2001 SALJ 720-746

Jordaan 2004 De Jure

Jordaan D "The Constitution's impact on the law of contract in perspective" 2004 De Jure 58-65

Kipling "The Law for the Wolves"

Kipling R "The Law for the Wolves" in Stedman EC (ed) A Victorian Anthology, 1837-1895 (Houghton Mifflin Boston 1895)

Knapp 2002 Fordham L Rev

Knapp CL "Taking Contracts Private: The Quiet Revolution in Contract Law" 2002 Fordham L Rev 761-798

Kruger 2011 SALJ

Kruger M "The role of public policy in the law of contract, revisited" 2011 SALJ 712-740

Leonhard 2009-2010 Conn J Int'l L

Leonhard C "A Legal Chameleon: An Examination of the Doctrine of Good Faith in Chinese and American Contract Law" 2009-2010 Conn J Int'l L 305-329

Lewis 2003 SALJ

Lewis J "Fairness in South African Contract Law" 2003 SALJ 330-351

Liew 2012 Sing JLS

Liew C "A leap of good faith in Singapore contract law" 2012 Sing JLS 416-440

Lubbe 1990 Stell LR

Lubbe G "Bona fides, Billikheid en die Openbare Belang in die Suid-Afrikaanse Kontraktereg" 1990 Stell LR 7-25

MacQueen "Good Faith in the Scots Law of Contract"

MacQueen HL "Good Faith in the Scots Law of Contract: An Undisclosed Principle?" in Forte ADM (ed) Good Faith in Contract and Property Law (Hart Oxford 1999) 5-37

Naudé 2003 SALJ

Naudé T "The function and determinants of the residual rules of contract law" 2003 SALJ 820-840

Naudé 2009 SALJ

Naudé T "The consumer's 'right to fair, reasonable and just terms' under the Consumer Protection Act in comparative perspective" 2009 SALJ 505-536

Naudé and Lubbe 2005 SALJ

Naudé T and Lubbe G "Exemption clauses - A rethink occasioned by Afrox Healthcare Bpk v Strydom" 2005 SALJ 441-463

Piers 2011 Tul Eur & Civ LF

Piers M "Good faith in English Law: Could a Rule become a Principle?" 2011 Tul Eur & Civ LF 123-169

Pretorius 2010 THRHR

Pretorius C-J "Exemption clauses and mistake: Mercurius Motors v Lopez 2008 (3) SA 572 (SCA)" 2010 THRHR 491-502

Rautenbach 2009 TSAR

Rautenbach IM "Constitution and contract - exploring 'the possibility that certain rights may apply directly to contractual terms or the common law that underlies them'" 2009 TSAR 613-637

Rautenbach 2011 THRHR

Rautenbach IM "Constitution and contract: The application of the Bill of Rights to contractual clauses and their enforcement - Bredenkamp v Standard Bank of SA Ltd 2010 9 BCLR 892 (SCA)" 2011 THRHR 510-524

Sims 2005 KCLJ

Sims V "Good faith in contract law: Of triggers and concentric circles" 2005 KCLJ 293-310

Sutherland 2008 Stell LR

Sutherland PJ "Ensuring contractual fairness in consumer contracts after Barkhuizen v Napier 2007 5 SA 323 (CC) - Part 1" 2008 Stell LR 390-414

Sutherland 2009 Stell LR

Sutherland PJ "Ensuring contractual fairness in consumer contracts after Barkhuizen v Napier 2007 5 SA 323 (CC) - Part 2" 2009 Stell LR 50-73

Tanzer 2010 Wash U Global Stud L Rev

Tanzer Z "Social norms and constitutional transformation: Tracing the decline of the application distinction in South Africa" 2010 Wash U Global Stud L Rev 457-509

Thomas 2008 International Journal of African Renaissance Studies

Thomas CG "Ubuntu: The missing link in the rights discourse in post- apartheid transformation in South Africa" 2008 International Journal of African Renaissance Studies Nov 39-62

Woolman 2007 SALJ

Woolman S "The amazing, vanishing Bill of Rights" 2007 SALJ 762-794

Woolman 2008 SALJ

Woolman S "Category mistakes and the waiver of constitutional rights: A response to Deeksha Bhana on Barkhuizen" 2008 SALJ 10-24

Zimmerman and Visser Southern Cross

Zimmerman R and Visser DP (eds) Southern Cross: Civil and Common Law in South Africa (Oxford University Press New York 1996)

Register of case law

ABN AMRO Bank, NV v MBIA Inc 2011 NY Slip Op 5542, 11-12 (2011)

Advtech Resourcing (Pty) Ltd t/a Communicate Personnel Group v Kuhn 2008 2 SA 375 (C)

African Dawn Property Finance 2 (Pty) Ltd v Dreams Travel and Tours CC 2011 ZASCA 45

Afrox Healthcare Bpk v Strydom 2002 6 SA 21 (SCA)

Bank of Lisbon and SA Ltd v De Ornelas 1988 3 SA 580 (A)

Barkhuizen v Napier 2007 5 SA 323 (CC)

Biotechnology Australia Pty Ltd v Pace 1988 15 NSWLR 130

Bredenkamp v Standard Bank of South Africa Ltd 2010 4 SA 468 (SCA)

Brisley v Drotsky 2002 4 SA 1 (SCA)

Burger v Central South African Railways 1903 TS 571

Carmichele v Minister of Safety and Security 2001 4 SA 938 (CC)

Chapelton v Barry Urban District Council 1940 1 KB 532

Crown Restaurant CC v Gold Reef City Theme Park (Pty) Ltd 2008 4 SA 16 (CC)

Den Braven SA (Pty) Ltd v Pillay 2008 6 SA 229 (D)

Du Plessis v De Klerk 1996 3 SA 850 (CC)

Eerste Nasionale Bank van SA v Saayman 1997 4 SA 302 (SCA)

Everfresh Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd 2012 1 SA 256 (CC)

HSBC Institutional Trust Services (Singapore) Ltd (trustee of Starhill Global Real Estate Investment Trust) v Toshin Development Singapore Pte Ltd 2012 SGCA 48

Indwe Aviation v Petroleum Oil and Gas Corporation of South Africa 2012 JDR 0824 (WCC)

Jordan v Farber 2009 ZANCHC 81

Kirke La Shelle Company v The Paul Armstrong Company 263 NY 79; 188 NE 163; 1933 NY

Maphango v Aengus Lifestyle Properties 2011 5 SA 19 (SCA)

Medscheme Holdings (Pty) Ltd v Bhamjee 2005 5 SA 339 (SCA)

Meskin v Anglo-American Corporation of SA Ltd 1968 4 SA 793 (W)

Mid Essex Hospital Services NHS Trust v Compass Group UK & Ireland Ltd (trading as MediRest) 2013 EWCA Civ 200

Miller v Dannecker 2001 1 SA 928 (C)

Mort v Henry Shields-Chiat 2001 1 SA 404 (C)

Mozart Ice Cream Franchises (Pty) Ltd v Davidoff 2009 3 SA 78 (C)

Naidoo v Birchwood Hotel 2012 6 SA 170 (GSJ)

Napier v Barkhuizen 2006 4 SA 1 (SCA)

Nyandeni Local Municipality v MEC for Local Government and Traditional Affairs 2010 4 SA 261 (ECM)

Olley v Marlborough Court Ltd 1949 1 KB 532

P Gerolomou Constructions (Pty) Limited v Van Wyk 2010 ZAGPPHC 258

Potgieter v Potgieter 2011 ZASCA 181

Reddy v Siemens 2006 SCA 164 (SA)

S v Makwanyane 1995 6 BCLR 665 (CC)

Sasfin (Pty) Ltd v Beukes 1989 1 SA 1 (A)

Savage & Lovemore Mining (Pty) Ltd v International Shipping Co (Pty) Ltd 1987 2 SA 149 (W)

Silent Pond Investments CC v Woolworths (Pty) Ltd 2011 6 SA 343 (D)

Siyepu v Premier of the Eastern Cape 2013 2 SA 425 (ECB)

South African Forestry Co Ltd v York Timbers Ltd 2005 3 SA 323 (SCA)

Standard Bank of SA v Dlamini 2013 1 SA 219 (KZD)

Van Jaarsveld v Bridges 2010 ZASCA 76

Woolworths (Pty) Ltd v Dula Investments (Pty) Ltd 2012 ZAWCHC 183

Yam Seng PTE Ltd v International Trade Corporation Ltd 2013 EWHC 111 (QB)

Register of legislation

Constitution of the Republic of South Africa, 1996

Consumer Protection Act 68 of 2008

National Credit Act 34 of 2005

Register of internet sources

Barnard-Naudé 2011 www.thoughtleader.co.za

Barnard-Naudé J 2011 Contract Law, Good Faith and the Constitution www.thoughtleader.co.za/jacobarnardNaudé/2011/12/02/contract-law-good-faith-and-the-constitution/ [date of use 14 Sep 2013]

De Vos 2011 constitutionallyspeaking.co.za

De Vos P 2011 About Family Fights and Transformative Constitutionalism constitutionallyspeaking.co.za/2011/10/13/ [date of use 14 Sep 2013]

Koep 2012 altumsonatur.wordpress.com

Koep C 2012 Balancing Good Faith: Considering the Consumer Protection Act altumsonatur.wordpress.com/2012/06/19/balancing-good-faith-considering-the-consumer-protection-act/ [date of use 14 Sep 2013]

SALRC 1998 www.justice.gov.za

SA Law Reform Commission 1998 Report - Project 47: Unreasonable Stipulations in Contracts and Rectification of Contracts www.justice.gov.za/salrc/reports/r_prj47_contracts_1998apr.pdf [date of use 14 Sep 2013]

Walsh 2001 www.acrel.org

Walsh WA 2001 Good Faith and Fair Dealing: New Issues and Nagging Concerns www.acrel.org/Documents/Seminars/a002186.pdf [date of use 14 Sep 2013]

Published

17-05-2017

Issue

Section

Articles

How to Cite

Louw, A. M. (2017). Yet Another Call for a Greater Role for Good Faith in the South African Law of Contract: Can we banish the Law of the Jungle, while avoiding the Elephant in the Room?. Potchefstroom Electronic Law Journal, 16(5), 43-120. https://doi.org/10.17159/1727-3781/2013/v16i5a2431

Similar Articles

331-340 of 1190

You may also start an advanced similarity search for this article.